BILL NUMBER: AJR 9	CHAPTERED  05/26/99

	RESOLUTION CHAPTER   40
	FILED WITH SECRETARY OF STATE   MAY 26, 1999
	ADOPTED IN SENATE   MAY 24, 1999
	ADOPTED IN ASSEMBLY   MARCH 22, 1999
	AMENDED IN ASSEMBLY   MARCH 22, 1999

INTRODUCED BY   Assembly Members Correa and Senator Ortiz
   (Coauthors:  Assembly Members Firebaugh, Honda, Knox, Pescetti,
Aanestad, Ackerman, Alquist, Bates, Battin, Baugh, Brewer, Briggs,
Calderon, Campbell, Cardenas, Cardoza, Corbett, Cox, Cunneen, Davis,
Dickerson, Ducheny, Dutra, Florez, Frusetta, Gallegos, Havice,
Hertzberg, House, Jackson, Keeley, Kuehl, Leach, Lempert, Leonard,
Longville, Lowenthal, Machado, Maddox, Maldonado, Mazzoni, Nakano,
Oller, Robert Pacheco, Rod Pacheco, Papan, Reyes, Romero, Scott,
Shelley, Soto, Strickland, Strom-Martin, Thompson, Thomson,
Torlakson, Villaraigosa, Vincent, Wesson, Wildman, and Zettel)
   (Coauthors:  Senators Baca, Costa, and Karnette)

                        MARCH 3, 1999

   Assembly Joint Resolution No. 9--Relative to Social Security.


	LEGISLATIVE COUNSEL'S DIGEST


   AJR 9, Correa.  Social Security:  mandatory coverage.
   This measure would memorialize the President and the Congress of
the United States not to include mandatory Social Security coverage
on noncovered state and local government employees in any Social
Security reform legislation.




   WHEREAS, The Social Security Trust Fund is expected to have
insufficient funds to meet its obligations by 2032; and
   WHEREAS, Comprehensive Social Security reform is necessary to
ensure continued viability of the Social Security system for the
millions of current and future beneficiaries; and
   WHEREAS, Legislation is expected to be considered in Congress
which is intended to provide financial stability to the Social
Security Trust Fund; and
   WHEREAS, Mandating coverage for all newly hired noncovered state
and local government employees has been suggested by some as one of
the possible options for financing Social Security reform; and
   WHEREAS, State and local government employers were initially
precluded from participating in the Social Security system when it
was established in 1935 on the basis that it was considered
unconstitutional for the federal government to tax state and local
governments; and
   WHEREAS, State and local governments established retirement plans
to meet their needs in lieu of Social Security coverage; and
   WHEREAS, The federal government is now searching for avenues to
finance the failing Social Security Trust Fund; and
   WHEREAS, Mandating Social Security coverage on all newly hired
noncovered employees extends the solvency of the Social Security
Trust Fund a mere two years; and
   WHEREAS, Mandatory Social Security coverage results in a tax
increase of 6.2 percent each for the state and local government
employer and employee; and
   WHEREAS, There are currently over one million noncovered public
employees in the State of California most notably public school
teachers, faculty, and administrators, and public safety, as well as
numerous city, county, and special district, employees; and
   WHEREAS, Estimates project a cost of at least $12.5 billion to
California's state and local government employers, primarily school
districts, and newly hired workers over the first 10 years of
implementation; and
   WHEREAS, Education reform is a critical priority for the State of
California; and
   WHEREAS, Mandatory Social Security coverage will have a
devastating impact on California's ability to implement education
reform measures, such as class size reduction; and
   WHEREAS, This increased tax from mandatory Social Security
coverage would come at the direct expense of education programs,
benefits, and services for students and employees in California; and
   WHEREAS, State and local government employers in California may
have no choice but to reduce services such as law enforcement, fire
protection, health, programs for senior citizens and the disabled,
library, parks and recreation, refuse collection, and recycling
programs in order to pay this new federal tax; and
   WHEREAS, Benefits currently provided by California's state and
local government retirement plans may need to be reduced due to the
cost imposed by mandatory Social Security coverage; and
   WHEREAS, The increased employee tax will result in a significant
reduction of a newly hired worker's take-home salary; and
   WHEREAS, Reducing the current retirement benefit structure and the
take-home salary of workers will have an adverse impact on the
recruitment and retention of public employees in California and
employee morale; and
   WHEREAS, This new tax is a shift of federal government burden to
our communities to solve a federal problem which our state and local
governments had no hand in creating and under which there will be no
benefit paid to our workers for more than a generation; and
   WHEREAS, Compelling state and local governments to participate in
the Social Security system provides no benefit to these public
employers, school districts, or students; now, therefore, be it
   Resolved by the Assembly and Senate of the State of California,
jointly, That the Legislature of the State of California urges the
President and the Congress of the United States in the strongest
possible terms not to include mandatory Social Security coverage on
noncovered state and local government employees in any Social
Security reform legislation; and be it further
   Resolved, That the Chief Clerk of the Assembly transmit copies of
this resolution to the President and Vice President of the United
States, to the Speaker of the House of Representatives, and to each
Senator and Representative from California in the Congress of the
United States.
